Printer Friendly

Inflation on its last legs.

Judging from current information on wholesale prices as well as the recent performance of the bond markets, it certainly looks like inflation is on its last legs.

The prices that businesses pay were down sharply in August, falling in some categories by nearly a percent. Sluggish demand and a variety of special factors pushed the Producer Price Index for Finished Goods down in August for the fourth consecutive month, a 0.6 percent drop from July. It was the largest fall of the four months, and tobacco and energy were the biggest contributors--food prices actually were up 0.5 percent. To get some perspective on these statistics, consider that wholesale prices for finished goods were only 0.6 percent higher than they were a year earlier.

Meanwhile, the bond market is in the midst of a rally that has pushed yields for long-term Treasury bonds down to levels not seen in more than 20 years.

In Indiana, the July unemployment figures were for most major Hoosier cities sharply lower than the estimates from June. Unfortunately, these rosy figures say more about the flaws in the Commerce Department's statistical methods than they do about the state's true economic health. The fall in unemployment rates--when it really happens--will be much more gradual. [TABULAR DATA OMITTED]
COPYRIGHT 1993 Curtis Magazine Group, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Indiana Indicators
Publication:Indiana Business Magazine
Date:Oct 1, 1993
Previous Article:Vera Bradley Designs.
Next Article:When Castro gets the boot.

Related Articles
Economic indicators: vital signs monitor economy's health.
How to read the economy: a primer.
Greenspan's new inflation vigilance.
Inflation targeting.
The financial market forecast.
Liquidity traps, policy rules for inflation targeting, and Eurosystem monetary-policy strategy. (Research Summaries).
British Pound Could Break Above 1.7950 On UK CPI, BOE Minutes.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters